 Hello, in this presentation, we will have multiple choice questions related to the closing process and financial statements. First question, which is not a result of the closing process? a. Transfer temporary account balances to the capital account b. Makes the draws account zero c. Makes revenue and expense account zero d. Has no effect on owner's capital account and e. Capital increases by revenue and decreases by draws Back to the original question, then we'll go through and see if we can narrow down some of our choices. Which is not a result of the closing process? So we're looking for what is not the result of the closing process. So remember what the closing process is, closing temporary accounts meaning income statement accounts and the draws account to the capital account. Okay, so which is not a result of the closing process? a. Transfer temporary account balances to the capital account So that's what we're doing, that's the closing process. We're going to transfer those temporary accounts, those income statement accounts and those draws accounts to the capital account, not that one. b. Makes the draws account zero Now this is a little bit more tricky because the draws account usually is a little more confusing for most people, but the draws account is a temporary account and therefore will be made zero, will be closed out to the capital account as well. So it's not that one, that one will happen. c. Makes revenue and expense accounts zero and revenue and expense accounts are temporary accounts. So when we have temporary accounts, they are revenue and expense accounts as well as they're not the only temporary accounts, but they are temporary accounts and they're most of the temporary accounts, the other one being draws for a sole proprietor, dividends for a corporation. So it's not going to be that one, that's what happens. d. Has no effect on the owner capital account Now I don't know about that because the owner capital is a kind of a permanent account, it's a balance sheet account, but it's really what we close out to. So I think that might be it, but we'll read the last one here. e. Capital increases by revenue and decreases by draws. And that really is what happens in the closing process, meaning we're going to close out revenue to the capital account and we're going to close out draws to the capital account. So it's not that one. Now note that d. Has to be this one here and note that it kind of has to be that way because of some of these other choices. This last one for example says capital increases by revenue and decreases by draws. Well if the capital is changing, then d has to be happening and I mean e has to happen and d says has no effect on the owner's capital account. So we can't have something that doesn't have an effect on the owner's capital account be true and e be true which says capital increases. And we can see that a also says transfer temporary account balances to the capital account. So if we transfer temporary accounts to the capital account that means the capital account is going to change and therefore we cannot have a be true and e be true and d be true because d says that the capital account has no effect to it. So note that if we look at some of the answers here we can kind of eliminate and say well then it has to be d. The capital account is changing by this amount and it has to be changing because it says it's changing at least two other choices. So once again the answer which is not a result of the closing process d has no effect on the owner's capital account. Next question assets liabilities and equity accounts are a nominal accounts b temporary accounts c real accounts d permanent accounts e income statement accounts once again question of and then we'll go through and see if we can eliminate some of these choices. Assets liabilities and equity accounts are note that those are all kind of balance sheet accounts. Those are the balance sheet accounts. So a says nominal accounts now we may not know the nominal so we're going to leave that for now b says temporary accounts now the temporary accounts are going to be the income statement accounts and the draws account and these are going to be the balance sheet accounts so it's not going to be the temporary accounts c says real accounts now real accounts doesn't really ring a bell at all to me so real accounts might not be a term that we that we'd be using but I'm going to leave it for now d says permanent accounts so permanent accounts that sounds kind of good because we know that the assets liabilities and equity are those that will not be closed out in the closing process so d looks pretty good to me e says income statement accounts the income statement accounts are temporary accounts that will be closed out to the equity section so it's not e now note that e income statement accounts and b are similar because they both refer to temporary accounts temporary accounts include the income statement accounts types now I'm going to go ahead and say that d the permanent accounts looks good and the main reason is because we're studying or we're looking at the closing process and the financial statements and that deals with permanent accounts and temporary accounts so we should be we're going to be dealing with permanent accounts and temporary accounts a lot and so that I think that's going to be the answer I'm going to eliminate c real accounts because I don't really remember that in our terminology that I'm not sure that's going to be a term that relates specifically to what we're talking about although they're all probably real accounts and it's true in a way we're going to say that a nominal accounts believe that's another term for temporary accounts and therefore once again we have the same kind of terminology temporary nominal and income statement accounts which all refer to in some way in some types of the temporary a temporary type of account going to the next question next question to common subgroups for libraries a current liabilities and debt liabilities b liabilities and current liabilities c general liabilities and applied liabilities d current liabilities and long term liabilities and e assigned at liabilities and long-term liabilities once again to and subgroups for current liabilities. We're taking a look at the balance sheet and we're basically breaking it up into those subgroups. So first we have the current liabilities, current liabilities and debt liabilities. Now the current liabilities sound correct, I mean the current liabilities are within a year. Debt liabilities doesn't sound quite right, I won't cross it out yet. B, liabilities and current liabilities. That sounds kind of right, but it's a little backwards. You would think current liabilities would be first and liabilities sounds like the total grouping. Not really a subgroup of it. It sounds like the total of it. So I'm gonna cross that out. I don't think that's it. C says the general liabilities and applied liabilities. These terms that just doesn't sound familiar to me at all. General liabilities and applied liabilities in the context of a normal kind of balance sheet I don't think is gonna be included so I'm gonna cross that out. D says current liabilities and long-term liabilities. There's our current liabilities again and long-term liabilities. So that one looks pretty good. And then E says assigned liabilities and long-term liabilities. So rather than current liabilities we now have assigned liabilities. That doesn't sound correct to me. I think current liabilities is the one. So we're left with A and D. Question once again. Two common subgroups for liabilities. A current liabilities and debt liabilities or D current liabilities and long-term liabilities. And I believe of the two we're gonna say D current liabilities and long-term liabilities. Answer once again. Two common subgroups for liabilities. D current liabilities and long-term liabilities.